Decker et al v. Statoil USA Onshore Properties, Inc. et al

Filing 134

MEMORANDUM OPINION AND ORDER DENYING AS PREMATURE AND WITHOUT PREJUDICE DEFENDANT'S 51 MOTION FOR PARTIAL SUMMARY JUDGMENT. Signed by Senior Judge Frederick P. Stamp, Jr. on 10/17/16. (copy to counsel via CM/ECF)(lmm)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
DEAN PATRICK DECKER, III
and LORETTA DECKER,
Plaintiffs,
v.

Civil Action No. 5:15CV114
(STAMP)

STATOIL USA ONSHORE
PROPERTIES, INC.,
a Delaware corporation
and PETROEDGE ENERGY, LLC,
a Delaware limited
liability company,
Defendants,
and
EQT PRODUCTION COMPANY,
Intervenor-Defendant.
MEMORANDUM OPINION AND ORDER
DENYING AS PREMATURE AND WITHOUT PREJUDICE
DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT
On April 29, 2016, the defendant filed a motion for partial
summary

judgment.

This

Court

then

granted

the

unopposed motion for leave to amend the complaint.

plaintiffs’

Discovery has

now been completed and dispositive motions are due by November 4,
2016.
partial

For the following reasons, the defendant’s motion for
summary

judgment

is

denied

as

premature

and

without

prejudice.
I.

Background

The plaintiffs’ (“the Deckers”) claims arise out of a 2011
agreement between Decker Energy LLC (“Decker Energy”) and PetroEdge

Energy, LLC’s (“PetroEdge”), called the “Participation Agreement.”
In the second amended complaint, the Deckers allege that they hold,
or are entitled to hold, overriding royalty interests in certain
oil and gas leases identified in the Participation Agreement as the
“Initial Leases,” the “Target Leases” acquired by PetroEdge, a
pooled unit known as the “Ball Unit,” and a well known as “Ball
Unit 1H.”
delegated

The Deckers allege that, after PetroEdge assigned and
its

rights

and

obligations

under

the

Participation

Agreement to Statoil USA Onshore Properties, Inc. (“Statoil”),
Statoil ceased paying royalties to the Deckers.

The Deckers also

allege a claim for unjust enrichment, seeking compensation for
work, expenses, and investments into these leases.
The Deckers seek a declaration that they hold or are entitled
to hold overriding royalty interests in the Initial Leases, the
acquired Target Leases, the Ball Unit, and Ball Unit 1H. They also
seek an accounting of the development and production on each lease
and the appointment of a special commissioner to execute and
deliver assignments of interests in the leases to the Deckers.
Further, the Deckers request a judgment for all unpaid royalties on
the leases and for their unjust enrichment claim.
Statoil filed a motion for partial summary judgment, asking
this Court to find that the Deckers do not hold and are not
entitled to hold overriding royalty interests in any leases not
expressly

identified

as

Target

2

Leases

in

the

Participation

Agreement.

Statoil

argues

that

the

plain

language

of

the

Participation Agreement provides that the Deckers had a right to
overriding royalty interests in only Target Leases that were
acquired by PetroEdge.

Thus, Statoil argues, the Deckers cannot

claim any interest in leases not identified as Target Leases in the
Participation Agreement.
In response, the Deckers argue that their second amended
complaint

moots

Statoil’s

motion

interests in non-Target Leases.
motion

is

premature

because

because

it

alleges

further

The Deckers argue that Statoil’s
the

Deckers

have

not

received

sufficient discovery to adequately respond to Statoil’s motion.
Deckers’ counsel submitted an affidavit under Federal Rule of Civil
Procedure 56(d) detailing the discovery that had been received at
the time and the parties’ discovery disputes.

The Deckers argue

that this Court should deny Statoil’s motion as premature or defer
ruling until discovery is complete.

Alternatively, the Deckers

argue that there is a genuine issue of material fact regarding the
Deckers’ interest in the Initial Leases, the Ball Unit, and Ball
Unit 1H, because the Ball Unit includes at least one Initial Lease.
In reply, Statoil argues that its motion is not premature
because it asks this Court to interpret the plain language of the
Participation Agreement.

Statoil argues that extraneous evidence

is not relevant to interpreting the Participation Agreement’s
terms.

Thus, Statoil argues that additional discovery is not

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needed for the Deckers to defend against its motion.

Statoil also

argues that the second amended complaint does not moot its motion
because

the

terms

of

the

Participation

Agreement

speak

for

themselves.
III.

Applicable Law

Under Federal Rule of Civil Procedure 56, a court must grant
a party’s motion for summary judgment if “there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”

Fed. R. Civ. P. 56(a).

Generally,

“summary judgment is appropriate only after ‘adequate time for
discovery.’”

Evans v. Techs. Applications & Serv. Co., 80 F.3d

954, 961 (4th Cir. 1996) (quoting Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986)).

Where a motion for summary judgment is

filed before there has been adequate time for discovery, a court
may “defer considering the motion or deny it[,] . . . allow time to
obtain affidavits or declarations or to take discovery[,] or . . .
issue any other appropriate order.”
nonmovant

must

show

“by

affidavit

Fed. R. Civ. P. 56(d).
or

declaration

that,

The
for

specified reasons, it cannot present facts essential to justify its
opposition.”

Id.

56(d)] affidavit.”

Courts must “place great weight on the [Rule
Evans, 80 F.3d at 961.
IV.

Discussion

First, this Court finds that Statoil’s motion for partial
summary judgment is premature and that the Deckers have complied

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with Rule 56(d)’s affidavit requirement. At the time Statoil filed
its

motion,

very

little

discovery

had

been

conducted.

No

depositions had been conducted and little written discovery had
been completed.
parties

The Deckers’ Rule 56(d) affidavit states that the

encountered

discovery

disputes

early

on,

which

were

ultimately resolved by the parties. The record confirms that these
disputes persisted after the parties fully briefed this motion.
See ECF No. 73 (approving stipulation extending the time for the
Deckers to file any motions to compel regarding Statoil’s responses
to written discovery requests).

Further, the Deckers represent

that their discovery requests encompassed information regarding the
negotiation,

formation,

and

execution

of

Agreement and other relevant documents.

the

Participation

These documents may

ultimately be relevant to the interpretation of the Participation
Agreement.
Second, this Court believes it is more prudent to deny without
prejudice

Statoil’s

motion

rather

than

deferring

a

ruling.

Discovery is now complete and this case has matured to a point that
motions for summary judgment are proper.
due by November 4, 2016.

Dispositive motions are

This Court believes that the parties

should be permitted to present in timely dispositive motions all
relevant arguments and evidence bearing on their dispute.

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V.

Conclusion

For the foregoing reasons, the defendant’s motion for partial
summary judgment (ECF No. 51) is DENIED AS PREMATURE AND WITHOUT
PREJUDICE.
IT IS SO ORDERED.
The Clerk is DIRECTED to transmit a copy of this memorandum
opinion and order to counsel of record herein.
DATED:

October 17, 2016

/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE

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